ArvinMeritor Rises on Fed Cut Stimulus Analyst Says (Update1)
ArvinMeritor Rises on Fed Cut, Stimulus, Analyst Says (Update1)
By Gopal Ratnam
Jan. 25 (Bloomberg) — ArvinMeritor Inc., the U.S. maker of
vehicle brakes and axles, rose for a fourth day in New York
trading as investors bet the government;s economic-stimulus plan
and a cut in interest rates will lift auto and truck sales.
ArvinMeritor increased 24 cents, or 2 percent, to $12.11 at
4:01 p.m. in New York Stock Exchange composite trading. The Troy,
Michigan-based partsmaker has risen 14 percent this week.
“The rate cut and stimulus package could help the economy
and help consumers with auto purchases in the second half of the
year,;; David Leiker, analyst at R.W. Baird %26amp; Co. in Milwaukee,
Wisconsin, said in an interview.
The central bank cut its target overnight lending rate on
Jan. 22 to 3.5 percent from 4.25 percent, the biggest single
reduction since the Fed began using the rate as the principal
tool of monetary policy about 18 years ago.
The cut may help jumpstart 2008 car sales, which automakers
forecast to be the lowest in 10 years, analysts said.
The Fed move is “going to provide a greater sense of
consumer confidence,;; Mark LaNeve, GM;s vice president for North
American sales, told reporters at the Washington D.C. Auto Show
this week. “It helps us to be aggressive in the market about
rates and lease programs.;;
Yesterday, the Bush administration and House lawmakers
announced agreement on an economic stimulus package that would
distribute rebate checks to 117 million families and give
businesses incentives to invest in equipment.
ArvinMeritor gets about 35 percent of its sales from cars
and light trucks, and the rest from commercial vehicles,
according to information the company provided at a presentation
in New York this month.
To contact the reporter on this story:
Gopal Ratnam in Washington at
